So now that you know why buy-to-let is one of the best and most effective methods of making money through property, what steps can you take to ensure you’re getting the most out of your buy-to-let venture? Here are seven top tips to keep in mind if you want to make money from property.
1. Look for Rental Demand
High rental demand is one of the number one qualities that you should look for when seeking a buy-to-let opportunity. Without demand for your property, you can’t make money from property investment as there will be no one to earn rental income from. During your initial research process, look for buy-to-let opportunities in areas with large populations of students and young professionals. These two tenant groups are more likely to be seeking a rental property, particularly an apartment in the city centre or other popular locations.
2. Find High Rental Yields
Rental yields represent the amount of money an investor is able to make through their buy-to-let venture, and without a high enough yield, making money in property is more difficult. As a rule of thumb, you should look for a rental yield of at least 5%, as any lower and you’re limiting your potential earnings. When looking at investment opportunities in buy-to-let hotspot areas like Liverpool, it can be easier to find high yields. Liverpool boasts some of the most profitable rental returns in the UK in 2024, with the L1 postcode offering an impressive gross yield of almost 12%. By identifying the areas and opportunities with the best possible yields, you can increase your chances of making money from property.
3. Consider Capital Growth
Alongside rental returns, capital growth returns are another of the most popular ways that investors make money from property investment. When researching buy-to-let properties, think about whether or not the area you’re interested in has a good track record for capital growth and strong future growth predictions. Investors who choose to buy property in the North West region, for instance, benefit from expected growth of 11.7% by 2027. The better an area’s predictions for capital appreciation, the more likely it will be that investors can expect their investment to increase in value over time, offering the chance to make some attractive returns.
4. Seek Off-Plan Discounts
The less you spend on your venture, the more chance you have of making money from property investment if the value of your property rises over time. One way to ensure you’re spending the lowest possible amount is by purchasing off-plan property, which is a property that hasn’t yet been completed and is still in the construction stage. Off-plan investment comes with a number of benefits, one of which is the fact that developers tend to offer discounted below-market prices for off-plan properties. Choosing to purchase off-plan buy-to-let is one of the smartest ways to ensure you’ll make money from property investment.
5. Keep Tenants Happy
Once you’ve found a buy-to-let property that you love, and secured some reliable tenants, one of the best things to do to continue making money in property investment is to keep your tenants happy. The longer tenants stay in your property, the longer you will be generating a consistent income and avoiding any void periods. Of course, if you’re a hands-off investor, it’s a little more difficult to have control over whether or not your tenant is pleased with both the property and management. That’s why it’s important to find the best property management company possible to manage your property on your behalf. This way, you can rest assured that both your property and your tenants are in good hands.
6. Build a Portfolio
If you’re just starting out in property investment, the best way to make money from property is by owning your first buy-to-let apartment or house. After this, you can continue to earn more and more income by building a wider property portfolio. Once you own a number of buy-to-let properties in top UK areas, making money from property happens more easily, and you’ll be able to build an attractive income in no time.
7. Plan your Exit Strategy
One of the key things to think about when getting started with property investment is to plan your exit strategy. An exit strategy helps buyers get a better idea of how and when they plan to leave their investment and allows them to take advantage of the best deals and get the most out of making money from property. For example, if you want to sell your property at a time when the market is at its highest, you should plan to monitor property prices and keep an eye on capital growth.
